tv Bulls and Bears FOX News February 16, 2013 7:00am-7:30am PST
>> welcome back, rick is our personal forecaster. freezing out there. >> tucker: your own weatherman. >> rick: i don't know, where? >> people are starting their weekend and it's going to be cold out there. >> rick: especially in florida coldest night of the year so far, northern half of florida tonight. >> alisyn: yikes. >> southern alabama. >> clayton: join us for the after the show show. more weather in the after the show show foxnews.com. >> tucker: coming up. >> . >> the pushing the president clinton mum to the max. president obama repeating calls today for a 24% hike in the federal minimum wage to $9
an hour. some folks here say don't raise it, get rid of it and that will really help jobs. are they right? hi, everyone, i'm brenda buttner, this is bulls and bears. let's get right to it. here they are the bulls and bears this week, gary b smith. john layfield. jonas max ferris along with larry glazier and caroline. gary b, forget hiking the minimum wage, you say scrapping it altogether is how to get better paying jobs. >> states with the highest minimum wage in many cases, higher than the current minimum wage that the fed, federal government outlines has higher unemployment than those states with lower minimum wage. look, it's simple economics, something which this current administration doesn't understand. when you raise the cost of labor, you have a surplus of labor, that's true in comments, stocks, whatever. when you have a surplus of labor, what do you have,
brenda? you have higher unemployment and simple as that, this administration doesn't understand. >> so what do you think of that, caroline, would this help or hurt unemployment if we just got rid of the minimum wage? >> well, i think that would be a terrible idea and i disagree with gary b. actually those studies have experienced-- that's a relationship, other variables causing those differences because two decades of rigorous research indicate he when you do it in a planful way and mild way and raise the minimum wage that it has a positive effect on the local economy. positive effects in terms of lower training costs and turnover and less lost time at work and dedicated employees, so small businesses, mid size and large businesses benefit from in, as well as local government because they don't have as many people relying on social services. so, the data doesn't back that up. in fact, it's a positive thing he when we do it in a planful fashion to raise the minimum wage. >> on this issue, just like an economist. on the one hand, on the other
hand, there are studies on both sides. but jonas there is an argument that higher minimum wages reducing turnover, which lessens the costs of employers and could increase employments. >> you would never leave the job if you could get it, it's a pretty good wage. negatives and benefits. both sides of kind of right. if the minimum wage is low $2, it wouldn't disrupt the job market. if it's $50, high unemployment, but a-- there's obviously a level between there where the negatives would exceed the positives. there are positives, workers would get more money under the plan and not outsourced to china. you need somebody in the stores, some benefit, but a lot of of losers, higher unemployment, certainly at some point, and other negatives. i sort of think they should get to the bottom of the research and do both. index it to inflation which they should do anyway and lets certain politicians benefit it, saying they're going to raise it every few years, if it raises the unemployment
rate in a couple of years, get rid of it and prove it's bad for the economy and we could kind of see what could happen. >> maybe it it should be indicated to average wages instead of inflation. >> john, is it more black and white? should we hike it or scrap it? what's better for the job market? >> i think a hybrid of it. and what you hit on, brenda, i think is the best thing to do and that is index it to average wages. and how far most people said. the data does not support this. the white house, the only study they could find is the 2010 study that had more people debunking it, than people saying it's a real study and the earned income tax credit does more than lower income people than raising the minimum wage and look, we have almost 50 million people in poverty right now and the only thing the administration can do is say, well, we can't create any jobs, so let's just have people pay people more and this is not the way to do it. we have 21%, young person unemployment and 40% african-american young person
unemployment and this hurts. >> i'll get to you in a minute, but i want caroline to have a chance to respond to some of these comments. >> i would very much agree with jonas, there is an imbalance here, right? we couldn't raise it to $30 an hour that wouldn't make sense, but argue with john, there is research, economic institute policy for example, and they're sophisticated and show there are not ill effects. but i would agree with you that something like, you know, an earned income credit would be better in terms of stimulating the economy, but this isn't a bad start. >> well, and actually the president isn't saying that this is a boost to the economy. it's more about fairness, i believe. but, larry, if you increase -- if you raise the price of employment do you basically decrease the demand for employment? does it come down to that? >> that's exactly right, brenda. the irony, this is intended to help those who need it the most, intended to help the economy or have the opposite effect. first of all, i don't believe
any of the studies on either side. think what we'll see in reality is companies will outsource wherever they can, and visit your local retailer, visit your local grocery store, you'll see more and more automated checkouts and that's what companies do for self-pre sel self-preservation. we'll pay more to the store. there's no free lunch. it sounds great on paper, sounds great in academic theory, in reality. the policies just do not and have not worked in the past. we're not talking about the past now, gary b. we're talking about really the future. we have a very tepid recovery. is this the time to be raising a minimum wage? >> absolutely not. you know, larry hits on a key point. is that let's take jonas' wal-mart example. let's say they had to pay this. what's wal-mart going to do? >> raise price toss absorb that cost. they know that k-mart and target across the street will
get hit with the minimum wage and they're going to raise it, they know they're not at a disadvantage, where does that cost go to? it goes to the consumer so everyone pays for the minimum wage and by the way, studies have shown barely affects those in poverty and only in fact the average household with a person of minimum wage earns $48,000. >> caroline, let's get to that point. that this really affects more s an impact on consumers? >> well, sure, it is an impact on consumers and i would challenge the notion that it won't benefit businesses to the point where they will need to raise prices. the fact is that businesses will benefit if ne treat their employees better, study after study indicated there's not an academic theory that you have less time off of work, you have lower recruitment and training costs which means that your employees stay there longer, less reliant on public services, the taxpayers benefit. corporations benefit. so i think you'd be hard pressed to make the argument na consumers are really going to get shafted on this one. >> john, you want to answer
that? >> how in the world can you say this is not going to affect businesses when it's a 24% raise on what you have to pay your employees? i don't know where they get $9 an hour, we haven't had inflation the last number of years, why do you take $9? this is a political thing that the president and the white house is doing. and that's simply all it is. we have 27 million americans out there that are true low income americans that don't have the skills fill out a job application. and they're going to do more them than good-- >> it will be have winners and losers, no question about it. even getting rid of it as ayn minimum wage, doesn't matter if we go to china or remove the checkout line from home dd depoe, these jobs are not going back at $1 an hour. raising 10 or 20 is not going to magically solve the problem
of poverty. >> gary b? >> this is a form of wage and price control. we tried that many, many times, we tried under nixon, tried under ford. it's been proven it doesn't work, it's assuming the government is all-knowing and all-being with prices and wages and we need to get off the idea that the government knows what the right price is to pay teenagers out there for crying out loud. >> okay, that's going to be our last word. thanks, guys. >> so, did you hear this? >> we have a spending problem, and when they talk about that, it's like there's an assumption that somehow we as a nation are broke. >> so, we're not broke? the cavuto on biz gang will do the math. you decide. that's at the bottom of the hour, but up here first. something is heating up on wall street. no, i'm not talking about those sports illustrated models ringing the closing bell this week. i am he' talking about all the hot deals. merger mania is back. a sign the economy is, too?
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>> live from america's news headquarters, i'm molly line. a massive cleanup operation underway in russia after a meteor blast sparked an explosion with the power of an atomic bomb. some 1200 people said to be injured. most of them cuts from flying glass. the meteor blow out windows of more than 4,000 buildings in the region. the cost of the damage so far, 33 million dollars. and we're learning soldiers deployed to afghanistan next year may see their work course extended an army general says budget cuts could limit training of brigades to replace them. there will be delays for those deploying in 2014. i'm molly line, now, back to bulls and bears. you're watching the most powerful name in news, fox.
>> whoa, talk about huge deals. lots of major companies tying the knot and 50 billion dollars and trouble ahead for the economy and market? how so? >> yes, brenda, well, normal mergers and acquisition are a good sign for the economy and show the companies are willing to open their wallets, commit capital on the future, but these particular deals show just the opposite. they show that companies are worried that because they're worried they're making the safest deals possible, the smartest deal maker of them all warren buffett is buying what? heinz, ketchup and mustard. nothing more defensive in an economic down turn is ketchup and mustard. worried about the consumer and impact of the higher payroll tax and higher gasoline prices and that's what we're worried and seeing and making safe,
conservative deals. >> jonas, usually, mergers are a good sign that the economy is booming and the market is doing well and that's the case now? >> yeah, as opposed to the high-tech companies that buffet bias. all right. you know what? it's a sign that the government-- they made cash so undesirable. and so many out there. the companies are swimming in cash and earnings at all-time highs and have to do something so they're panicking to put it into work, and don't want to pay out like aggressive like apple does. and they have the ideas how to use the money and don't want to hire people and so they're merging. >> brenda: okay, john, is this risky or is this a good thing for the the economy? >> i'm not sure it's a good thing for the economy. i don't think it's a bad thing for the economy. i think it's a bad thing for small and medium sized businesses, but look, when you have apple who has more money than the u.s. government, but of course, we all have more money than the u.s. government, there's no real place to put this money, and what jonas talked about with
this, give it back in dividends which a lot of people consider lazy and uncreative to try to go out and buy company. the rich are getting richer and the big companies, the only place they can use the huge acquisitions to put the huge pile of cash to good use. >> brenda: gary b, we talk about the markets be in record highs or all-time highs and we were basically where we were six years ago. >> exactly, brenda. in fact the nasdaq is way below its all-time highs, so there's plenty of room to grow and getting back to, you know, larry and jonas made excellent points. normally merger activity is a harbinger of an improving economy and i think the stock market could break higher. the only point, jonas said about buffet always buys companies like that, if larry was really right and things were going to get bad, then you'd think that buffet would hate for heinz to have a tremendous pullback. so, you know, that's the only thing.
i think he thinks that heinz is going to improve its fortunes and the stock is going to rise. i think overall, it's positive. >> brenda: okay. caroline what do you make of all of this? weigh in. >> i think it's pretty unmitigatedly positive. we're seeing twice the amount of activity when it comes to merger and acquisitions. and means that the companies are now starting to loosen up, there's 1 trillion dollars that they've stock piled during the economic down turn. that can only be good and speaks to the stabilization of the banking economy, and it speaks to the relative stabilization of what's happening in europe, so, i think it's great for companies, of course, mergers are a mixed deal for consumers, some are positive when it comes to price, and services, others are not. i think that the airlines merging is going to lead to higher fares and fewer routes. at least for the forseeable future unless the airlines are involved and get some competition. good for business not so good for consumers. >> brenda: more on the airline
merger coming up. is this a plan that companies have basically done everything they could to grow profits by cutting costs and now they have to buy their rivals? >> exactly right. they've taken the meat off the bone and there's nothing left in terms of efficiencies here. the challenge here, this is not going to create employment. and when you see them like the airline industry you take capacity out and raise prices, may be good for profitability and those particular industries, but it's not good for the consumer, but really not for employment. this is not going to raise prices and shows that companies need to put that money to work and can't earn zero in cash which is what it will pay today and they want to find a safe place to put that money what the deals are all about. >> brenda: jonas is this because of or despite washington? >> first of all, we invested profit creation, not job creation when you're investing in stock. when you're an investor, in the stock market, rather than hire people and-- >> what was the exact question again? >> is this because of washingtons or despite it?
>> it's because of federal reserve which is government policy and making cash, and i will say it's also because the government obviously wants to shift this money to labor and that's minimum wage we were talking about and a way to shift the cash it to buy other companies and not in salaries, so you could say it's something to do with government policy. >> brenda: and i don't care what the question is, i don't always get that. as the deals take off, are air fares next? neil's crew ready for take off in less than 15 minutes. first, carnival's triumph wasn't quite the "titanic," but someone here is saying what lawmakers are pushing to prevent this mess from happening again could sink a big part of the economy for good. searing for a bank designed for investors like you? tdd#: 1-800-345-2550 schwab bank was built with all e value and convenience tdd#: 1-800-345-2550 investors want. tdd#: 1-800-345-2550 like no atm fees, worldwide. tdd#: 1-800-345-2550 and no nuisance fees. tdd#: 1-800-345-2550 plus deposit ches with mobile deposit. tdd#: 1-800-345-2550
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there's something that works differently than over-the-counter remedies. prescription tamiflu attacks the flu virus at its source. so don't wait. call your doctor right away. tamiflu is prescription medicine for treating the flu in adults and children one year and older whose flu symptoms started within the last two days. before taking tamiflu tell your doctor if you're pregnant, nursing. have serious health conditions, or take other medicines. if you develop an allergic reaction, a severe rash, or signs of unusual behavior, stop taking tamiflu and call your doctor immediately. children and adolescents in particular may be at an increased risk of seizures, confusion or abnormal behavior. the most common side effects are mild to moderate nausea and vomiting. the flu comes on fast, so ask your doctor about tamiflu. prescription for flu. >> coming up. carnival's triumph turning into turmoil for passengers and some are warning d.c.'s fix to prevent is from
>> carnival getting slammed with at least one lawsuit for stranding all those passengers for days. but some say that d.c.'s response could slam an important part of our economy for good. what's going on here. >> carnival sued get sued and sued a lot more, and the market is going to punish these guys. congress is going after cruise ships and reminds me 2008 and 2009, the world was falling apart they wanted to investigate steroids in baseball. they don't have a budget, the lower labor participation rate in over three decades and want more restrictions on what the conga. put them on a cruise ship and leave them out there for a decade and the country will be better. >> brenda: talk about the trip from hell. can the government prevent another one of these
catastrophes? >> i kind of like john's idea putting members of congress on one of these ships when they can't get along. i think that government should step in not the first time, but the third time in last 27 months carnival had a similar problem, right? three floating disasters, if you will. and it could have easily been prevented had they just updated their fleet to have redundant electrical systems all three disasters could have been prevented. why aren't they updating the fleet? putting profits above people. and government say fine, you provide an excellent service, but need to provide for safety as well. >> brenda: gary b. doesn't the market take care of this. who is going on a carnival cruise now? >> exactly. you have to be living in a cave, you know, to be-- and i'm going to take a cruise next week? huh? there's he a cruise disaster? i never now until i got on the ship. people go to the website, read the news, huh, maybe i'll take a royal caribbean cruise or a disney cruise, but carnival
says itself they're going to get hit and this is respond the lawsuits. at least 80 million dollars for repairs and damages and cancellations and refunds. plus, we, you know, probably going to be canceling not ever taking a cruise again. and that's, you know, when caroline says well, they're putting profits before people and it sounds like in this case the profits are going to be behind the people. >> i think so. all right, larry, you just throw this idea of government interference overboard. >> the reason people go cruising because it's affordable and fun and if you get the government involved you're not going to be able to eat all you want and drink all you want and do belly flops, and no longer affordable fun. and i think we've got to keep the government out. >> brenda: i want to defend carnival for a minute. refunding the amount of the cruise and giving credit. >> absolutely. >> brenda: so, they really are trying to make some good on this, jonas.
>> and never waste valuable tank space with the life boats -- and to gary's point. the utilities like where there's no competitor in your area or a small like travelling circus, no brand at risk you need safety. when there's a large conglomerates like disney or mcdonald's, competitors and brand at risk, you don't need a whole lot of oversight from the government. there's so much to lose from these embarrassments. >> brenda: and thanks, guys, and thank you to caroline. earth dodging an asteroid, but not a meteor. the name that could protect your life and your lively who had from the next close encounter. [ male announcer ] at his current pace, bob will retire when he's 153, which would be fine if bob were a vampire. but he's not. ♪ he's an architect with two kids and a mortgage.